So you think you’ve got problems? Consider the biotech industry in the Bay Area.
Coming up on five years after the recession threatened to tear the heart out of the industry, biotech companies in the Bay Area continue to struggle in many ways.
Sure, Big Biotech (think Genentech Inc. and Gilead Sciences Inc.) is churning out cutting-edge drugs to fight cancer, hepatitis C and HIV, and companies like cancer drug developer Onyx Pharmaceuticals and BioMarin Pharmaceutical, with its franchise of six-figure rare disease drugs, are growing into the role of healthy mid-stage companies.
But the environment for early-stage and maturing companies eyeing The Next Big Thing is fraught with challenges. Venture capital for early-stage companies is weak. What’s more, despite a thaw in the IPO market, generalist Wall Street investors who flock to what’s hot still haven’t committed to biotech.
“We’ve seen very, very good companies that are in Phase III that no one cares about” — mainly because they need to run large, expensive heart-related clinical trials — said Chris Hite, global head of health care investment banking at Citigroup. “Pharma doesn’t care, either.”
But it’s not all doom and gloom. There are signs of new life in the life sciences, and new funding models are emerging that could change the scope of the industry. At the same time, many of these startups are backed by mind-blowing science and a focus of getting the right drug to the right patient at the right time — or what University of California, San Francisco, Chancellor Susan Desmond-Hellmann has tagged “precision medicine.”
Read more: San Francisco Business Times (blog) Biotech: Not easy, but worth it